As Chinese policymakers struggle to arrest a slowdown in growth, July home price data looks likely to confirm the housing market as a rare counterpoint to a growing list of grim economic indicators.
Property sales bottomed out in January-June after declining for more than a year, propped up by a barrage of government support measures since last September, including a series of interest rate cuts and lower down-payment requirements.
There are indications that the pace of recovery may be quickening in the housing market, which accounts for about 15 percent of the economy.
On Sunday, the country's biggest property developer, China Vanke Co Ltd , said its half-year core profit climbed 5.5 percent, and trumpeted the "emergence and growth of massive new property demand".
"It'll take time, but it's confirmed that a recovery is ongoing," Vanke's president Yu Liang told reporters on Monday.
Data from researchers at China Real Estate Index System show Vanke is backing that prognosis with cash, spending 30 percent more on land purchases in January-July than in the same year-ago period.
There have been precious few triggers for investment in recent economic data releases.
Exports have tumbled, investment growth has hit repeated lows and the stock market crashed 30 percent in a matter of weeks, keeping policymakers busy with an unprecedented slew of support measures, including a currency devaluation and repeated attempts to increase lending.
Even if China hits its official target this year, economic growth would hit a 25-year low of 7 percent.
Big Cities Lead the Way
In the housing market, which hit the skids after previous heavy-handed efforts to cool a speculative bubble, the support measures appear to be bearing fruit.
"It's the policy that makes it possible to buy my second apartment. Without lower down-payments, I couldn't make the decision this time," said 33-year-old tourism worker Lilian Liu, who bought a second home in the eastern city of Hangzhou last month, helped by money she made in the stock market before the crash.
Though overall real estate investment growth continued to slow in January-July, property sales and housing investment improved, which Li Jiao, senior statistician at the National Bureau of Statistics, said would fuel growth in total property investment in the coming months.
Prices in first-tier cities such as Beijing, Shanghai and Shenzhen have been leading the recovery.
"I've been watching the housing market for several months," said a Beijing lawyer who gave his surname as Wang. "Upward is surely the direction of home prices in Beijing. A recent recovery in transactions helped me sell my first flat quickly and got the money to buy another one," he said.
Source: Reuters 18th August (Reporting by Xiaoyi Shao and Kevin Yao; Writing by Will Waterman; Editing by Ian Geoghegan)